OUR STATE PREDICTS AN INCREASE IN REVENUE, BUT IT’S NOT ENOUGH TO SUPPORT CRITICAL NEEDS FOR KIDS AND FAMILIES
By Max Lau - Policy Manager, Health & Economic Justice
We know that quality and affordable education, health care, and nutritious food are key components to thriving communities. We also know that communities with access to these resources see improved outcomes in behavioral health and life expectancy. In short, these things are necessities and should be guaranteed to everyone. To meet the ever-evolving needs of communities and guarantee these essential services, our state needs to generate enough revenue. Based on recent reporting, this means the state must pursue and secure more progressive sources of revenue going forward.
According to a forecast from the Economic and Revenue Forecast Council (ERFC), Washington may have $770 million more in revenue over the next four years than previously expected. Washington’s economic activity is the envy of the nation, and we are excited about the new and continued resources this additional revenue will support. But when you consider that the state’s forecasted revenue for the next two years is only an increase of 3.3% over the expected revenue for the last two years, it’s clear that there is still much more we can—and must—do to raise funds for critical initiatives, including things like:
Ensuring ALL students in Washington are fed;
Responding to the behavioral health crisis affecting so many of Washington’s youth; and
Reducing the economic impacts of inflation and rising housing costs for working Washingtonians.
The forecasted increase in revenue is thanks to things like Washington’s historically low unemployment rate and, of particular interest, the passage of improved tax structures such as the capital gains excise tax. Notably, the capital gains tax is projected to raise over $889 million in revenue this year—more than double the amount anticipated for its first year. Wins like this are promising, and there are more opportunities for sourcing revenue through progressive changes to Washington’s tax structure.
Washington is unique in that a disproportionate amount of tax burden is placed on families with the lowest incomes while the ultra-wealthy are able to avoid paying their fair share. So, efforts to change this regressive tax structure, like the capital gains tax, will increase revenue and result in better outcomes for our communities. In the 2024 legislative session, lawmakers will propose a supplemental budget amendment to the biennium budget passed earlier this year. This proposal will allow legislators to allocate the unexpected additional funds toward high-priority areas such as schools, behavioral health, and health care.
Here are a few additional ways that our state can ease the burden on working Washingtonians:
A new 1% tax on ultra-high value financial properties such as stocks and bonds worth over $250 million. This tax would raise an additional $3 billion for the state each year, which could provide funding for critical programs.
Protecting the recently passed capital gains excise tax from attempts to repeal it by those motivated by greed. The capital gains tax has already surpassed expected revenue figures and we can expect to see investments in child care and schools.
Expansions to the Working Families Tax Credit, which has already been shown to provide much needed relief to residents across Washington state.
Lawmakers have a duty to use our tax money wisely and invest in services and resources that will have measurable benefits for Washington families. As advocates, it is our responsibility to maintain the momentum of these and other promising initiatives. At Children’s Alliance, we work to ensure that the needs of our kids and families are not only being discussed but also prioritized at the highest levels of government.
As we approach the 2024 legislative session, know that this is our continued promise to you: to work alongside you to address critical needs in education, health, and economic justice for children and families in Washington because we know that this is the only way to ensure kids have an abundance of what they need to grow up and be the people they dream of becoming.
Join our email list for updates on our work and opportunities to take action in the upcoming legislative session.